Skybus just crashed and burned. Touted as a great “economic development” feat by Columbus, the landing of the airline in Columbus with incentives and tax breaks, and countless hours of government types chasing the airline all came to an end last Friday.
The real question is do we, the people, get our money back?
Skybus files for Chapter 11 bankruptcy protection – Dayton Business Journal:
Skybus Airlines Inc. has officially moved from the tarmac to bankruptcy court.
The Columbus-based discount airline, whose board voted to discontinue service Friday after less than a year of operation, filed for Chapter 11 bankruptcy protection in the Delaware district of U.S. Bankruptcy Court.
The airline in the filing listed total liabilities of between $50 million and $100 million owed to between 200 and 1,000 creditors. It said it owes $12.7 million to its top 20 unsecured creditors. It listed assets of between $100 million and $500 million.
The defunct airline’s largest creditor, with an $8.5 million claim, is Chicago’s World Fuel Management, a subsidiary of Miami Springs, Fla.-based World Fuel Services Corp. (NYSE:INT) that provides third-party fuel-management, financing and related services to airlines.
Skybus’ other two largest creditors are Airbus NA, which supplied Skybus’ fleet of A319 jets, and American Express Co. (NYSE:AXP). Airbus carries a $1.9 million disputed claim, while American Express is owed $600,000.
The only Central Ohio creditor among Skybus’ top 20 is the Columbus Regional Airport Authority, which carries a $200,000 claim.
The first Skybus flight left the tarmac of Port Columbus May 22, 2007, after three years of organizing and raising $160 million from Central Ohio and Wall Street investors. The company blamed record-high fuel costs and a flagging economy for its decision to shut down.
If you want to get sick- look at this article about State tax breaks and incentives for NetJets.
So just remember, when you are wondering why there are potholes on your street, homes being foreclosed on, and the price of gas is going through the roof- your elected representation was busy worrying about how to subsidize private jets and airlines that had a business model that wouldn’t fly.